RPT Oil sector drives shock fall in Feb UK industrial output

LONDON, March 10 (Reuters) - British industrial output suffered a shock fall in February after a big monthly decline in oil and gas extraction due to maintenance work, official data showed on Wednesday.

The figures point to a less strong rebound in broader economic output during the first three months of 2011, which may discourage the Bank of England from raising interest rates at t he start of next month, especially as factory output stagnated too.

The Office for National Statistics said that industrial output contracted by 1.2 percent in February after downwardly revised growth of 0.3 percent in January. Economists had forecast a 0.4 percent increase in industrial output over the month, and this was the biggest fall since August 2009.

The narrower measure of manufacturing output -- which does not include utilities or oil and gas extraction -- was also worse than forecast and stagnated in February, after Jan uary's downwardly revised growth of 0.9 percent.

Year-on-year, industrial output growth slowed to 2.4 percent, its weakest since July 2010.

Manufacturing output had been one of the few bright spots in Britain's economy, benefiting from a weak pound and strengthening demand from other countries.

Manufacturing PMI surveys in January and February suggested the sector was growing at its fastest pace in at least 16 years, though the index weakened in March.

The ONS said that oil and gas extraction fell by 7.8 percent, its biggest drop since August 2009. Within manufacturing, there were big falls in production of chemicals and in th e 'other manufacturing' category, which includes recycling and making furniture.

The government and Bank of England are relying on strong export-driven growth in manufacturing in 2011 to fill the gap created by cuts in government spending and belt-tig htening by consumers.